New Delhi: The Bears pushed the
Life Insurance Corporation of India
(LIC) shares fell on Monday to all-time low levels, with the stock sliding below the Rs. 800 mark.
The stock traded down 1.64 percent at Rs 787.10. During the day, it hit a low of Rs. 786.05. From its IPO issue price of Rs 949, the prices are down over 17 percent.
With the fall in share prices, the market capitalization of the company also fell below Rs 5 lakh crore, to Rs 4.98 lakh crore. It is now the seventh most valuable company in the country.
Shares of LIC were listed on May 17, and since then there have been just four sessions when the stock has closed with gains, data shows. For the rest of the day, it has crumbled under selling pressure.
Most analysts are neutral on the counter and don’t see much upside in it.
Emkay Global termed LIC as "the elephant that cannot dance" and said most of its growth is priced in. The broker added that its size, domination in the industry and legacy will continue to be hurdles for the share price to rise.
"Size and legacy are key hurdles in radically changing the product and distribution mix. LIC’s biggest strength has been its vast 13 lakh agent network, with materially higher productivity relative to private peers. However, this also has a cost in terms of a large branch network and higher opex, leading to a traditional par-heavy product mix," it said in its report.
The issue had come with much fanfare after a long period of anticipation and a drastic cut in size. As many as 17 analysts had given subscribe ratings and had high expectations. It was justified to an extent as it is the biggest life insurer in India.
Emkay gave a ‘hold’ rating and set a target price of Rs 875 on the stock. That means a potential upside of 11 per cent.
Macquarie also had come out with a ‘neutral’ rating even before the stock got listed with a target of Rs 1,000.